Competitive analysis is very important. It helps you understand what your rivals are good at and what they’re not, spot chances and dangers, and make your business plans better.
Competitive analysis means looking into and checking out what other companies in your business area or market are doing. You study their good and bad points, how much of the market they control, who they’re selling to, and how they advertise.
The aim of competitive analysis is to find ways to be different from others and make plans that give your company an edge. It’s an important part of planning for your business. It helps you know who you’re up against and what the situation is like, so you can make smart choices for your own company.
Doing competitive analysis
To see how you stack up against others, do these things:
- Figure out who your main rivals are: Make a list of them and look them up online.
- Learn about what your rivals offer: Look into their products, services, prices, how they market, and what their customers say.
- Compare what you offer: See how your stuff is different from your rivals’. Think about quality, features, cost, and customer service.
- Check out how your rivals market: See how they promote their things and reach their customers.
- Look at what customers say about your rivals: See what they’re saying and how it compares to what your customers say about you.
- Find what makes you special: Figure out what makes your business different and use that in how you sell it.
- Keep an eye on your rivals: For example, once a month or every three months, see what they’re up to and how well they’re doing. This keeps you in the game and ahead.
Big pro tip: It’s best to do this with your whole management team, like a month before you have big meetings to make plans and strategy. It gets everyone thinking and makes you feel a bit uneasy, but that’s good for coming up with new ideas. It also makes you feel that you need to hurry to make changes.
Look at annual reports for a deep look into the money side of things, to see how you measure up.
Still, it’s more important to focus on your own business. Now you have an idea of where other companies might be going, which can really help you think about your own plans and what new things you could make.
This is called competitive benchmarking, a term from the ’90s.
M. Porter
If you want to really understand competitive analysis, read this great book called Competitive Advantage by Michael E. Porter.
Use these words to search more and really get to know your competition and analyze them:
competitors, industry analysis, market share, SWOT analysis, market competition, competitor analysis tools, competitive intelligence, competitive advantage, target audience, unique value proposition, market trends.
Facts about Competitive Analysis
1. 72% of businesses say competitive intelligence is critical to their success.
Regular competitive analysis helps businesses stay informed, adapt quickly, and identify new opportunities.
Reference: Crayon – State of Competitive Intelligence Report 2020
https://www.crayon.co/
2. Companies that monitor competitors frequently are 2x more likely to increase market share.
Ongoing analysis helps spot threats and trends before they impact your business.
Reference: Forrester Research (via Crayon)
Cited in: https://www.crayon.co/blog/competitive-intelligence-statistics/
3. SWOT analysis is one of the most used tools in competitive analysis.
It helps businesses compare their strengths and weaknesses against competitors and identify strategic areas for improvement.
Reference: Harvard Business School Online – Business Strategy Guide
https://online.hbs.edu/blog/post/swot-analysis
4. 80% of executives say understanding competitor strategy is essential for business planning.
Competitive insights directly influence product development, marketing, and pricing strategies.
Reference: Gartner – Market & Competitive Intelligence Insight
https://www.gartner.com/en
5. Digital tools like SEMrush, SimilarWeb, and SpyFu are widely used for competitor tracking.
These platforms provide insights into traffic sources, keywords, ad strategies, and audience behavior.
Reference: SEMrush Competitive Research Guide
https://www.semrush.com/kb/518-competitive-research
FAQ
What is competitive analysis and why is it important?
Competitive analysis is the process of identifying and evaluating your competitors’ strengths, weaknesses, strategies, and market position. It helps you find opportunities to stand out, improve your offerings, and make smarter business decisions.
What should I look at when analyzing competitors?
Key areas include their products/services, pricing, marketing strategies, customer reviews, online presence, and market share. This helps you understand what works for them and where you can do better or differently.
How often should I do a competitive analysis?
Ideally, you should review competitors quarterly or at least twice a year. Markets change quickly, so regular analysis keeps your strategy relevant and helps you respond to shifts before your competitors do.
